Exhibit 10.15
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[FORM OF]
SECOND PRIORITY MORTGAGE, ASSIGNMENT OF LEASES AND
RENTS,
SECURITY AGREEMENT AND FINANCING STATEMENT
FROM
[ ]
AS SUBSIDIARY GUARANTOR,
THE MORTGAGOR,
TO
WILMINGTON TRUST COMPANY,
AS COLLATERAL TRUSTEE FOR THE SECOND PRIORITY DEBT PARTIES,
THE MORTGAGEE,
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DATED:
PREMISES:
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TABLE OF CONTENTS
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PAGE
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ARTICLE 1
SECTION 1.01. Title.............................................4
SECTION 1.02. Senior Loan Documents.............................5
SECTION 1.03. Second Priority Debt Documents; Second Priority
Subsidiary Guarantee Agreement....................6
SECTION 1.04. Payment of Taxes, Liens and Charges...............6
SECTION 1.05. Payment of Closing Costs..........................7
SECTION 1.06. Plans, Alterations and Waste; Repairs.............7
SECTION 1.07. Insurance.........................................8
SECTION 1.08. Casualty Condemnation/Eminent Domain..............8
SECTION 1.09. Assignment of Leases and Rents....................8
SECTION 1.10. Restrictions on Transfers and Encumbrances........9
SECTION 1.11. Security Agreement...............................10
SECTION 1.12. Filing and Recording.............................10
SECTION 1.13. Further Assurances...............................10
SECTION 1.14. Additions to Mortgaged Property..................11
SECTION 1.15. No Claims Against Mortgagee......................11
SECTION 1.16. Fixture Filing...................................11
SECTION 1.17. Notice Regarding Special Flood Hazards...........11
ARTICLE 2
DEFAULTS AND REMEDIES
SECTION 2.01. Events of Default................................12
SECTION 2.02. Demand for Payment...............................12
SECTION 2.03. Rights to Take Possession, Operate and Apply
Revenues.......................................12
SECTION 2.04. Right to Cure Mortgagor's Failure to Perform.....13
SECTION 2.05. Right to a Receiver..............................13
SECTION 2.06. Foreclosure and Sale.............................14
SECTION 2.07. Other Remedies...................................14
SECTION 2.08. Application of Sale Proceeds and Rents...........15
SECTION 2.09. Mortgagor as Tenant Holding Over.................15
SECTION 2.10. Waiver of Appraisement, Valuation, Stay,
Extension and Redemption Laws..................16
SECTION 2.11. Discontinuance of Proceedings....................16
SECTION 2.12. Suits to Protect the Mortgaged Property..........16
SECTION 2.13. Filing Proofs of Claim...........................16
SECTION 2.14. Possession by Mortgagee..........................16
SECTION 2.15. Waiver...........................................17
SECTION 2.16. Remedies Cumulative..............................17
ARTICLE 3
MISCELLANEOUS
SECTION 3.01. Partial Invalidity...............................18
SECTION 3.02. Notices..........................................18
SECTION 3.03. Successors and Assigns...........................18
SECTION 3.04. Satisfaction and Cancellation....................18
SECTION 3.05. Definitions......................................19
SECTION 3.06. Rules of Interpretation..........................19
SECTION 3.07. Multistate Real Estate Transaction...............19
SECTION 3.08. Subordination; Intercreditor Agreement...........20
SECTION 3.09. Collateral Trust and Intercreditor Agreement.....20
SECTION 3.10. Amendments in Writing............................20
ARTICLE 4
PARTICULAR PROVISIONS
SECTION 4.01. Applicable Law; Certain Particular Provisions....21
Exhibit A Description of Land
Exhibit B Premises Located in a Special Flood Hazard Area
Appendix A Local Law Provisions
Appendix B Definitions Annex
THIS SECOND PRIORITY MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY
AGREEMENT AND FINANCING STATEMENT dated as of June ___, 2000 (this "SECOND
PRIORITY MORTGAGE"), by the Subsidiary Guarantor listed on the cover page
hereof, having an office, care of Rite Aid Corporation, at 00 Xxxxxx Xxxx,
Xxxx Xxxx, Xxxxxxxxxxxx 00000 (the "MORTGAGOR"), to WILMINGTON TRUST
COMPANY, a Delaware banking corporation, having an office at Xxxxxx Square
North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000-0000 ( the
"MORTGAGEE"), as Second Priority Collateral Trustee for the benefit of the
Second Priority Debt Parties.
Unless otherwise specifically defined herein, each capitalized term
used herein that is defined in the Definitions Annex shall have the meaning
assigned to such term in the Definitions Annex attached hereto as Appendix B.
WITNESSETH THAT:
(A) Reference is made to the Senior Credit Agreement dated as of the
date hereof (the "SENIOR CREDIT AGREEMENT"), among Rite Aid Corporation, a
Delaware Corporation (the "BORROWER"), the banks from time to time party
thereto and Citicorp USA, Inc., as Senior Administrative Agent and Senior
Collateral Agent for the banks and the Collateral Trust and Intercreditor
Agreement dated as of the date hereof (the "COLLATERAL TRUST AND
INTERCREDITOR AGREEMENT"), among Rite Aid Corporation, certain subsidiaries
of Rite Aid Corporation, Wilmington Trust Company as Second Priority
Collateral Trustee and Citicorp USA, Inc., as Senior Collateral Agent, and
each Second Priority Representative, as amended from time to time.
(B) Reference is made to the Senior Mortgage dated as of the date
hereof (the "SENIOR MORTGAGE"), with Citicorp USA, Inc., as Senior
Collateral Agent pursuant to which the Mortgagor has granted to the Senior
Collateral Agent a first mortgage lien on the property described herein.
The lien of this Second Priority Mortgage is intended by the Mortgagor and
the Mortgagee to be junior and subordinate to the lien of the Senior
Mortgage.
(C) Reference is also made to Second Priority Debt Documents,
including (i) the RCF Facility dated as of June 12, 2000, among Rite Aid
Corporation, the banks party thereto and Xxxxxx Guaranty Trust Company of
New York, as administrative agent (the "RCF FACILITY"), (ii) the PCS
Facility dated as of June 12, 2000, among Rite Aid Corporation, the banks
party thereto and Xxxxxx Guaranty Trust Company of New York, as
administrative agent (the "PCS FACILITY"), (iii) the Exchange Debt Facility
dated as of June 12, 2000, among Rite Aid Corporation, the banks party
thereto and Xxxxxx Guaranty Trust Company of New York, as administrative
agent (the "EXCHANGE DEBT FACILITY"), (iv) the 10.50% Senior Secured Notes
Due 2002 of Rite Aid (i) issued in exchange for certain 5.50% Notes Due
2000 of Rite Aid and 6.70% Notes Due 2001 of Rite Aid or (ii) issued on the
Closing Date to SPV and to be transferred to SSB, JPM and their respective
transferees and assignees pursuant to the Forward Commitment Agreement (the
"EXCHANGE NOTES"), (v) the Amendment No. 3 to Note Agreement, Amendment No.
4 to Guaranty Agreement, Amendment No. 1 to Put Agreement (the "Omnibus
Agreement") dated as of June 12, 2000 relating to the Adjustable Rate
Senior Secured Notes due August 15, 2002 originally issued by Xxxxx, Inc.
and guaranteed by Rite Aid Corporation pursuant to separate Note Agreements
dated as of September 30, 1996 (the "XXXXX FACILITY"), and (vi) certain
synthetic leases entered into by Subsidiary Guarantors and guaranteed by
Rite Aid having an aggregate discounted present value of approximately
$214,000,000, as amended and restated as of the Closing Date (the
"SYNTHETIC LEASE FACILITIES").
(D) Mortgagor is a wholly owned subsidiary of the Borrower and will
derive substantial benefit from the amendment to and extensions of the
Second Priority Debt Documents. In order to induce the Second Priority Debt
Parties to among other things amend and extend the Second Priority Debt
Documents, the Mortgagor has agreed to (i) guarantee, among other things,
the due and punctual payment and performance of all of the Second Priority
Debt Obligations of the Borrower under the Second Priority Debt Documents
pursuant to the terms of the Second Priority Subsidiary Guarantee Agreement
dated as of even date herewith (the "SECOND PRIORITY SUBSIDIARY GUARANTEE
AGREEMENT") made by Mortgagor and certain other subsidiaries of Borrower
(each, a "SUBSIDIARY GUARANTOR") in favor of Mortgagee in its capacity as
Second Priority Collateral Trustee for the benefit of the Second Priority
Debt Parties, and (ii) execute and deliver this Second Priority Mortgage in
the form hereof to secure all of the Second Priority Debt Obligations
guaranteed by Mortgagor pursuant to the Second Priority Subsidiary
Guarantee Agreement.
(E) Pursuant to the requirements of the Second Priority Debt
Documents the Mortgagor therefore grants this Second Priority Mortgage to
create a second lien on and a security interest in the Mortgaged Property
(as defined herein) to secure the payment and performance by the Mortgagor
of the Second Priority Debt Obligations. The Second Priority Debt Documents
also requires the granting by the other Subsidiary Guarantors of mortgages,
deeds of trust and deeds to secure debt (the "OTHER MORTGAGES") that create
liens on and security interests in certain parcels of real property and
related fixtures (each, an "OTHER MORTGAGED PROPERTY") to secure the
payment and performance of the Second Priority Debt Obligations.
GRANTING CLAUSES
NOW, THEREFORE, IN CONSIDERATION OF the foregoing and in order to
secure the due and punctual payment and performance of the Second Priority
Debt Obligations for the benefit of the Second Priority Debt Parties,
Mortgagor hereby grants, conveys, mortgages, assigns and pledges to the
Mortgagee and its successors and assigns forever, a security interest in,
all the following described property (the "MORTGAGED PROPERTY") whether now
owned or held or hereafter acquired:
(1) the land more particularly described on Exhibit A hereto (the
"LAND"), together with all rights appurtenant thereto which may, by
their terms or as a matter of law, be conveyed or assigned along with
the Land, including the easements over certain other adjoining land
granted by any easement agreements, covenant or restrictive agreements
and all air rights, mineral rights, water rights, oil and gas rights
and development rights, if any, relating thereto, and also together
with all of the other easements, rights, privileges, interests,
hereditaments and appurtenances thereunto belonging or in any way
appertaining and all of the estate, right, title, interest, claim or
demand whatsoever of Mortgagor therein and in the streets and ways
adjacent thereto, either in law or in equity, in possession or
expectancy, now or hereafter acquired (the "PREMISES");
(2) all buildings, improvements, structures, paving, parking areas,
walkways and landscaping now or hereafter erected or located upon the
Land, and all fixtures of every kind and type affixed to the Premises
or attached to or forming part of any structures, buildings or
improvements and replacements thereof now or hereafter erected or
located upon the Land (the "IMPROVEMENTS");
(3) all apparatus, appliances, building materials, equipment,
fittings, machinery and other articles of tangible personal property
of every kind and nature, and replacements thereof owned by Mortgagor
and now or at any time hereafter affixed to the Improvements or the
Premises, including all pumps, tanks, machinery, apparatus, equipment,
lifts, fire sprinklers and alarm systems, fire prevention or control
systems, cleaning rigs, air conditioning, heating, boilers,
refrigerating, electronic monitoring, water, loading, unloading,
lighting, power, sanitation, waste removal, communications,
partitions, lighting fixtures, freezers, refrigerators, walk- in
coolers, signs (indoor and outdoor), and all other items of tangible
personal property of any kind affixed to the Improvements or the
Premises, it being understood that the enumeration of any specific
articles of property shall in no way result in or be held to exclude
any items of property not specifically mentioned (the property
referred to in this subparagraph (3), the "FIXTURES");
(4) all general intangibles owned by Mortgagor and relating to design,
development, operation, management and use of the Premises or the
Improvements, all certificates of occupancy, zoning variances,
building, use or other permits, approvals, authorizations and consents
ob tained from and all materials prepared for filing or filed with any
governmental agency in connection with the development, use, operation
or management of the Premises and Improvements, all construction,
service, engineering, consulting, leasing, architectural and other
similar contracts concerning the design, construction, management,
operation, occupancy and/or use of the Premises and Improvements, all
architectural drawings, plans, specifications, soil tests, feasibility
studies, appraisals, environmental studies, engineering reports and
similar materials relating to any portion of or all of the Premises
and Improvements, and all payment and performance bonds or warranties
or guarantees relating to the Premises or the Improvements, all to the
extent assignable (the "PERMITS, PLANS AND WARRANTIES");
(5) all now or hereafter existing leases or licenses (under which
Mortgagor is landlord or licensor) and subleases (under which
Mortgagor is sublandlord), concession, management, mineral or other
agreements of a similar kind that permit the use or occupancy of the
Premises or the Improvements for any purpose in return for any
payment, or the extraction or taking of any gas, oil, water or other
minerals from the Premises in return for payment of any fee, rent or
royalty (collectively, "LEASES"), and all agreements or contracts for
the sale or other disposition of all or any part of the Premises or
the Improvements, now or hereafter entered into by Mortgagor, together
with all charges, fees, income, issues, profits, receipts, rents,
revenues or royalties payable thereunder ("RENTS");
(6) all real estate tax refunds and all proceeds of the conversion,
voluntary or involuntary, of any of the Mortgaged Property into cash
or liquidated claims ("PROCEEDS"), including Proceeds of insurance
maintained by the Mortgagor and condemnation awards, any awards that
may become due by reason of the taking by eminent domain or any
transfer in lieu thereof of the whole or any part of the Premises or
Improvements or any rights appurtenant thereto, and any awards for
change of grade of streets, together with any and all moneys now or
hereafter on deposit for the payment of real estate taxes, assessments
or common area charges levied against the Mortgaged Property, unearned
premiums on policies of fire and other insurance maintained by the
Mortgagor covering any interest in the Mortgaged Property or required
by the Second Priority Debt Documents; and
(7) all extensions, improvements, betterments, renewals, substitutes
and replacements of and all additions and appurtenances to, the Land,
the Premises, the Improvements, the Fixtures, the Permits, Plans and
Warranties and the Leases, hereinafter acquired by or released to the
Mortgagor or constructed, assembled or placed by the Mortgagor on the
Land, the Premises or the Improvements, and all conversions of the
security constituted thereby, immediately upon such acquisition,
release, construction, assembling, placement or conversion, as the
case may be, and in each such case, without any further mortgage, deed
of trust, conveyance, assignment or other act by the Mortgagor, all of
which shall become subject to the lien of this Second Priority
Mortgage as fully and completely, and with the same effect, as though
now owned by the Mortgagor and specifically described herein.
TO HAVE AND TO HOLD the Mortgaged Property unto the Mortgagee, its
successors and assigns, for the ratable benefit of the Second Priority Debt
Parties, forever, subject only to the Permitted Encumbrances (as
hereinafter defined) and to satisfaction and cancellation as provided in
Section 3.04.
ARTICLE 1
REPRESENTATIONS, WARRANITES AND COVENANTS OF
MORTGAGOR
Mortgagor agrees, covenants, represents and/or warrants as follows:
SECTION 1.01. Title. (a) Mortgagor has good and marketable title to:
(i) an indefeasible fee estate in the Land and Improvements; and
(ii) all of the Fixtures;
subject only to (A) the Senior Mortgage, (B) liens, pledges, charges and
other encumbrances which (x) do not secure indebtedness for borrowed money
or (y) are identified in Section 4.16(a) of the Senior Credit Agreement or
in the Second Priority Debt Documents and (C) minor defects in title that
do not interfere with the ability of Mortgagor or any other subsidiary of
the Borrower to conduct its business as presently conducted or to utilize
the Mortgaged Property for its intended purpose (collectively, the
"PERMITTED ENCUMBRANCES").
(b) There are no Leases affecting the Land or the Improvements except
as disclosed in the Second Priority Debt Documents.
(c) Mortgagor is not obligated under, and the Mortgaged Property is
not bound by or subject to, any right of first refusal, option or other
contractual right to sell, assign or otherwise dispose of any Mortgaged
Property or any interest therein.
(d) The granting of this Second Priority Mortgage is within
Mortgagor's corporate powers and has been duly authorized by all necessary
corporate, and, if required, stockholder action. This Mortgage has been
duly executed and delivered by Mortgagor and constitutes a legal, valid and
binding obligation of Mortgagor, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in
equity or at law.
(e) This Mortgage, when duly recorded in the appropriate public
records and when financing statements are duly filed in the appropriate
public records, will create a valid, perfected and enforceable
second-priority lien upon and security interest in all the Mortgaged
Property subject only to the Permitted Encumbrances. As of the date hereof,
there are no defenses or offsets to this Second Priority Mortgage that will
be asserted by Mortgagor or its affiliates (or any third party defense or
offset now known to Mortgagor or its affiliates) or to any of the Second
Priority Debt Obligations secured hereby for so long as any portion of the
Second Priority Debt Obligations remains outstanding. Mortgagor will
forever warrant and defend its title to the Mortgaged Property, the rights
of Mortgagee therein under this Second Priority Mortgage and the validity
and priority of the lien of this Second Priority Mortgage against the
claims of all persons and parties except those having rights under
Permitted Encumbrances, to the extent of those rights.
SECTION 1.02. Senior Loan Documents. The Mortgagor hereby covenants
that (i) the Mortgagor shall promptly pay when due and payable the
principal, interest and other charges mentioned in and made payable by the
Senior Loan Documents; (ii) the Mortgagor shall promptly perform and
observe all of the terms, covenants and conditions required to be performed
and observed by the Mortgagor under the Senior Loan Documents within the
grace and cure periods provided in the Senior Loan Documents; (iii) the
Mortgagor shall notify the Mortgagee (A) promptly prior to the expiration
of any applicable grace and cure period for which provision is made in the
Senior Loan Documents of any monetary default, and (B) promptly after the
expiration of any applicable grace and cure period for which provision is
made in the Senior Loan Documents of any non-monetary default by the
Mortgagor in the performance or observance of any of the terms, covenants
or conditions on the part of the Mortgagor to be performed or observed
under the Senior Loan Documents; and (iv) the Mortgagor shall (A) promptly
notify the Mortgagee of the receipt by the Mortgagor of any notice from the
holders of the Senior Obligations asserting or claiming a default by the
Mortgagor in the performance or observance of any of the terms, covenants
or conditions on the part of the Mortgagor to be performed or observed under
the Senior Loan Documents, and (B) promptly cause a copy of each such
notice to be delivered to the Mortgagee.
SECTION 1.03. Second Priority Debt Documents; Second Priority
Subsidiary Guarantee Agreement. (a) This Mortgage is given pursuant to the
Second Priority Debt Documents and the Second Priority Subsidiary Guarantee
Agreement. Each and every term and provision of the Second Priority Debt
Documents and the Second Priority Subsidiary Guarantee Agreement (excluding
the governing law provisions thereof), including the rights, remedies,
obligations, covenants, conditions, agreements, indemnities,
representations and warranties of the parties thereto shall be considered
as if a part of this Second Priority Mortgage.
(b) If Mortgagee exercises any of its rights or remedies under this
Second Priority Mortgage, or if any actions or proceedings (including any
bankruptcy, insolvency or reorganization proceedings) are commenced in
which Mortgagee is made a party and is obliged to defend or uphold or
enforce this Second Priority Mortgage or the rights of Mortgagee hereunder
or the terms of any Lease, or if a condemnation proceeding is instituted
affecting the Mortgaged Property, Mortgagor will pay all reasonable sums,
including reasonable attorneys' fees and disbursements, incurred by
Mortgagee related to the exercise of any remedy or right of Mortgagee
pursuant hereto and the reasonable expenses of any such action or
proceeding together with all statutory or other costs, disbursements and
allowances, interest thereon from the date of demand for payment thereof at
the lesser of (i) the rate per annum (computed on the basis of the actual
number of days elapsed over a year of 365 or 366 days, as the case may be)
equal to the sum of (A) the rate of interest publically announced by
Citibank in New York, New York, from time to time as its "base rate", plus
(B) 2.00% and (ii) the rate which, together with all fees, charges and
other amounts which are treated as interest on such amounts under
applicable law, constitutes the maximum lawful rate which may be contracted
for, charged, taken, received or reserved by Mortgagee in accordance with
applicable law (the "DEFAULT INTEREST RATE"), and such sums and the
interest thereon shall, to the extent permissible by law, be a lien on the
Mortgaged Property prior to any right, title to, interest in or claim upon
the Mortgaged Property attaching or accruing subsequent to the recording of
this Second Priority Mortgage and shall be secured by this Second Priority
Mortgage to the extent permitted by law. Any payment of amounts due under
this Second Priority Mortgage not made on or before the due date for such
payments shall accrue interest daily without notice from the due date until
paid at the Default Interest Rate, and such interest at the Default
Interest Rate shall be paid by Mortgagor to Mortgagee within 10 days after
Mortgagor's receipt of notice from the Mortgagee that it is due.
SECTION 1.04. Payment of Taxes, Liens and Charges. (a) Except to the
extent they are being contested in the manner permitted by the Second
Priority Debt Documents, Mortgagor will pay and discharge from time to time
prior to the time when the same shall become delinquent, and before any
interest or penalty accrues thereon or attaches thereto, (i) all taxes and
assessments (general and special), water and sewer rents and/or charges,
public or private impositions, levies, dues, permit, inspection and license
fees, vault charges, service charges, public or private common area charges
or maintenance charges, utility charges of every kind and nature which may
become liens on the Mortgaged Property with priority over the lien of this
Second Priority Mortgage and (ii) all other material public or private
charges, whether created or evidenced by recorded or unrecorded documents
or of a like or different nature, imposed upon or assessed against the
Mortgaged Property or any part thereof or upon the Rents from the Mortgaged
Property or arising in respect of the occupancy, use, operation or
possession thereof.
(b) In the event of the passage of any state, Federal, municipal or
other governmental law, order, rule or regulation subsequent to the date
hereof (i) deducting from the value of real property for the purpose of
taxation any lien or encumbrance thereon or in any manner changing or
modifying the laws now in force governing the taxation of this Second
Priority Mortgage or debts secured by mortgages or deeds of trust (other
than laws governing income, franchise and similar taxes generally) or the
manner of collecting taxes thereon and (ii) imposing a tax to be paid by
Mortgagee, either directly or indirectly, on this Second Priority Mortgage
or any of the Second Priority Debt Documents, or requiring an amount of
taxes to be withheld or deducted therefrom, Mortgagor will promptly notify
Mortgagee of such event. In such event, (A) Mortgagor shall at the request
of Mortgagee, execute an instrument or agreement which obligates Mortgagor
to make such additional payments as may be necessary to place Mortgagor and
the Second Priority Debt Parties in the same economic position they would
have been in with respect to the Second Priority Debt Obligations if such
law, order, rule or regulation had not been passed and (B) Mortgagor shall
make such additional payments.
(c) At any time that an Event of Default (as hereinafter defined)
shall occur and be continuing, or if required by any law applicable to
Mortgagor or to Mortgagee, then in accordance with the terms of the
Collateral Trust and Intercreditor Agreement, Mortgagee shall have the
right to direct Mortgagor to make an initial deposit on account of real
estate taxes and assessments, insurance premiums and common area charges,
levied against or payable in respect of the Mortgaged Property in advance
and thereafter on a quarterly basis, each such deposit to be equal to
one-quarter of any such annual charges estimated in a reasonable manner by
Mortgagee in order to accumulate with Mortgagee sufficient funds to pay
such taxes, assessments, insurance premiums and charges. Any such deposits
held by Mortgagee shall be returned to Mortgagor within 30 days after this
Second Priority Mortgage is released or satisfied as provided in Section
3.04.
SECTION 1.05. Payment of Closing Costs. Mortgagor shall pay all
reasonable costs incurred by or on behalf of the Mortgagee in connection
with, relating to or arising out of the preparation, execution and
recording of this Second Priority Mortgage, including title company
charges, inspection costs, recording fees and taxes, attorneys', engineers'
and consultants' fees and disbursements and all other, similar expenses of
every kind.
SECTION 1.06. Plans, Alterations and Waste; Repairs. (a) To the
extent the same exist on the date hereof or are obtained in connection with
future permitted alterations, Mortgagor shall maintain a complete set of
final plans, specifications, blueprints and drawings for the Mortgaged
Property either at the Mortgaged Property or in a particular office at the
headquarters of Mortgagor to which Mortgagee shall have access upon
reasonable advance notice and at reasonable times.
(b) Mortgagor shall not:
(i) demolish or remove all or any material portion of the
Improvements;
(ii) commit any waste on the Mortgaged Property or make any alterations
to the Mortgaged Property which would materially diminish the utility
of Mortgaged Property in the conduct of the business of the Mortgagor
or its affiliates as conducted thereon on the date hereof;
(iii) change the use of the Mortgaged Property or take any other action
with respect to the Mortgaged Property if it would materially
increase the risk of fire or any other hazard or violate the terms of
any insurance policy required by Section 1.07 hereof;
without the consent of the Mortgagee in each instance, such consent not to
be unreasonably withheld or delayed.
(c) Mortgagor will keep and maintain the Improvements and the Fixtures
in good repair, working order and condition, reasonable wear and tear
excepted.
SECTION 1.07. Insurance. Mortgagor will purchase and maintain liability
insurance, insurance on the Improvements and Fixtures and other insurance in
accordance with the terms of the Second Priority Debt Documents.
SECTION 1.08. Casualty Condemnation/Eminent Domain. Mortgagor shall
give Mortgagee prompt written notice of any casualty or other damage to the
Mortgaged Property or any proceeding for the taking of the Mortgaged
Property or any portion thereof or interest therein under power of eminent
domain or by condemnation or any similar proceeding. The proceeds received
by or on behalf of the Mortgagor in respect of any such casualty, damage or
taking shall constitute trust funds held by the Mortgagor for the benefit
of the Second Priority Debt Parties to be applied in accordance with the
terms of the Collateral Trust and Intercreditor Agreement.
SECTION 1.09. Assignment of Leases and Rents. (a) Mortgagor hereby
irrevocably and absolutely grants, transfers and assigns all of its right
title and interest in all Leases, together with any and all extensions and
renewals thereof for purposes of securing and discharging the performance
by Mortgagor of the Second Priority Debt Obligations. Mortgagor has not
assigned or executed any assignment of, and will not assign or execute any
assignment of, any other Lease or their respective Rents to anyone other
than Mortgagee and the Senior Collateral Agent.
(b) Without Mortgagee's prior written consent, which shall not be
unreasonably withheld or delayed, Mortgagor will not enter into, modify,
amend, terminate or consent to the cancellation or surrender of any Lease.
(c) Subject to Section 1.09(d), Mortgagor has assigned and transferred
to Mortgagee all of Mortgagor's right, title and interest in and to the
Rents now or hereafter arising from each Lease heretofore or hereafter made
or agreed to by Mortgagor, it being intended that this assignment
establish, subject to Section 1.09(d), an absolute transfer and assignment
of all Rents and all Leases to Mortgagee and not merely to grant a security
interest therein. Subject to Section 1.09(d), Mortgagee may in Mortgagor's
name and stead (with or without first taking possession of any of the
Mortgaged Property personally or by receiver as provided herein) operate
the Mortgaged Property and rent, lease or let all or any portion of any of
the Mortgaged Property to any party or parties at such rental and upon such
terms as Mortgagee shall, in its sole discretion, determine, and may
collect and have the benefit of all of said Rents arising from or accruing
at any time thereafter or that may thereafter become due under any Lease.
(d) So long as an Event of Default shall not have occurred and be
continuing, Mortgagee will not exercise any of its rights under Section
1.09(c), and Mortgagor shall receive and collect the Rents accruing under
any Lease; but after the happening and during the continuance of any Event
of Default, subject to prior rights under the Senior Loan Documents, the
Mortgagee may, at its option, receive and collect all Rents and enter upon
the Premises and Improvements through its officers, agents, employees or
attorneys for such purpose and for the operation and maintenance thereof.
Mortgagor hereby irrevocably authorizes and directs each tenant, if any,
and each successor, if any, to the interest of any tenant under any Lease,
respectively, to rely upon any notice of a claimed Event of Default sent by
Mortgagee to any such tenant or any of such tenant's successors in
interest, and thereafter to pay Rents to Mortgagee without any obligation
or right to inquire as to whether an Event of Default actually exists and
even if some notice to the contrary is received from the Mortgagor, who
shall have no right or claim against any such tenant or successor in
interest for any such Rents so paid to Mortgagee. Each tenant or any of
such tenant's successors in interest from whom Mortgagee or any officer,
agent, attorney or employee of Mortgagee shall have collected any Rents,
shall be authorized to pay Rents to Mortgagor only after such tenant or any
of their successors in interest shall have received written notice from
Mortgagee that the Event of Default is no longer continuing, unless and
until a further notice of an Event of Default is given by Mortgagee to such
tenant or any of its successors in interest.
(e) Mortgagee will not become a mortgagee in possession so long as it
does not enter or take actual possession of the Mortgaged Property. In
addition, Mortgagee shall not be responsible or liable for performing any
of the obligations of the landlord under any Lease, for any waste by any
tenant, or others, for any dangerous or defective conditions of any of the
Mortgaged Property, for negligence in the management, upkeep, repair or
control of any of the Mortgaged Property or any other act or omission by
any other person.
(f) Mortgagor shall furnish to Mortgagee, within 45 days after a
request by Mortgagee to do so (but no more frequently than twice annually),
a written statement containing the names of all tenants, subtenants and
concessionaires of the Premises or Improvements, the terms of any Lease,
the space occupied and the rentals or license fees payable thereunder.
SECTION 1.10. Restrictions on Transfers and Encumbrances. Except as
expressly permitted by the Senior Loan Documents, Second Priority Debt
Documents and this Second Priority Mortgage, Mortgagor shall not directly
or indirectly sell, convey, alienate, assign, lease, sublease, license,
mortgage, pledge, encumber or otherwise transfer, create, consent to or
suffer the creation of any lien, charges or any form of encumbrance upon
any interest in or any part of the Mortgaged Property, or be divested of
its title to the Mortgaged Property or any interest therein in any manner
or way, whether voluntarily or involuntarily (other than resulting from a
condemnation), or engage in any common, cooperative, joint, time-sharing or
other congregate ownership of all or part thereof.
SECTION 1.11. Security Agreement. This Mortgage is both a mortgage of
real property and a grant of a security interest in personal property, and
shall constitute and serve as a "Security Agreement" within the meaning of
the uniform commercial code as adopted in the state wherein the Premises
are located ("UCC"). Mortgagor has hereby granted unto Mortgagee a security
interest in and to all the Mortgaged Property described in this Second
Priority Mortgage that is not real property, and simultaneously with the
recording of this Second Priority Mortgage, Mortgagor has filed or will
file UCC financing statements, and will file continuation statements prior
to the lapse thereof, at the appropriate offices in the state in which the
Premises are located to perfect the security interest granted by this
Second Priority Mortgage in all the Mortgaged Property that is not real
property. Mortgagor hereby appoints Mortgagee as its true and lawful
attorney-in- fact and agent, for Mortgagor and in its name, place and
stead, in any and all capacities, to execute any document and to file the
same in the appropriate offices (to the extent it may lawfully do so), and
to perform each and every act and thing reasonably requisite and necessary
to be done to perfect the security interest contemplated by the preceding
sentence. Mortgagee shall have all rights with respect to the part of the
Mortgaged Property that is the subject of a security interest afforded by
the UCC in addition to, but not in limitation of, the other rights afforded
Mortgagee hereunder and under the Security Agreement.
SECTION 1.12. Filing and Recording. Mortgagor will cause this Second
Priority Mortgage, any other security instrument creating a security
interest in or evidencing the lien hereof upon the Mortgaged Property and
each instrument of further assurance to be filed, registered or recorded in
such manner and in such places as may be required by any present or future
law in order to publish notice of and fully to protect the lien hereof
upon, and the security interest of Mortgagee in, the Mortgaged Property.
Mortgagor will pay all filing, registration and recording fees, all
Federal, state, county and municipal recording, documentary or intangible
taxes and other taxes, duties, imposts, assessments and charges, and all
reasonable expenses incidental to or arising out of or in connection with
the execution, delivery and recording of this Second Priority Mortgage, any
mortgage supplemental hereto, any security instrument with respect to the
Fixtures or any instrument of further assurance.
SECTION 1.13. Further Assurances. Upon demand by Mortgagee, Mortgagor
will, at the cost of Mortgagor and without expense to Mortgagee, do,
execute, acknowledge and deliver all such further acts, deeds, conveyances,
mortgages, assignments, notices of assignment, transfers and assurances as
Mortgagee shall from time to time reasonably require for the better
conveying, assigning, transferring and confirming unto Mortgagee the
property and rights hereby conveyed or assigned or intended now or
hereafter so to be, or which Mortgagor may be or may hereafter become bound
to convey or assign to Mortgagee, or for carrying out the intention or
facilitating the performance of the terms of this Second Priority Mortgage,
or for filing, registering or recording this Second Priority Mortgage, and
on demand, Mortgagor will also execute and deliver and hereby appoints
Mortgagee as its true and lawful attorney-in-fact and agent, for Mortgagor
and in its name, place and stead, in any and all capacities, to
execute and file to the extent it may lawfully do so, one or more financing
statements, chattel mortgages or comparable security instruments reasonably
requested by Mortgagee to evidence more effectively the lien hereof upon
the Fixtures and to perform each and every act and thing requisite and
necessary to be done to accomplish the same.
SECTION 1.14. Additions to Mortgaged Property. All right, title and
interest of Mortgagor in and to all extensions, improvements, betterments,
renewals, substitutes and replacements of, and all additions and
appurtenances to, the Mortgaged Property hereafter acquired by or released
to Mortgagor or constructed, assembled or placed by Mortgagor upon the
Premises or the Improvements, and all conversions of the security
constituted thereby, immediately upon such acquisition, release,
construction, assembling, placement or conversion, as the case may be, and
in each such case without any further mortgage, conveyance, assignment or
other act by Mortgagor, shall become subject to the lien and security
interest of this Second Priority Mortgage as fully and completely and with
the same effect as though now owned by Mortgagor and specifically described
in the grant of the Mortgaged Property above, but at any and all times
Mortgagor will execute and deliver to Mortgagee any and all such further
assurances, mortgages, conveyances or assignments thereof as Mortgagee may
reasonably require for the purpose of expressly and specifically subjecting
the same to the lien and security interest of this Second Priority
Mortgage.
SECTION 1.15. No Claims Against Mortgagee. Nothing contained in this
Second Priority Mortgage shall constitute any consent or request by
Mortgagee, express or implied, for the performance of any labor or services
or the furnishing of any materials or other property in respect of the
Mortgaged Property or any part thereof, nor as giving Mortgagor any right,
power or authority to contract for or permit the performance of any labor
or services or the furnishing of any materials or other property in such
fashion as would permit the making of any claim against Mortgagee in
respect thereof.
SECTION 1.16. Fixture Filing. Certain portions of the Mortgaged
Property are or will become "fixtures" (as that term is defined in the UCC)
on the Land, and this Second Priority Mortgage, upon being filed for record
in the real estate records of the county wherein such fixtures are
situated, shall operate also as a financing statement filed as a fixture
filing in accordance with the applicable provisions of said UCC upon such
portions of the Mortgaged Property that are or become fixtures. The
addresses of the Mortgagor, as debtor, and Mortgagee, as secured party, are
set forth in the cover page of this Second Priority Mortgage.
SECTION 1.17. Notice Regarding Special Flood Hazards. Mortgagee has
informed Mortgagor, and Mortgagor hereby acknowledges that it realizes,
that the Premises listed on Exhibit B is in an area identified by the
Director of the Federal Emergency Management Agency as a "special flood
hazard area" described in 12 C.F.R. ss.22.2, and Mortgagor hereby
acknowledges that it has received, as of the date hereof, the notice
regarding Federal disaster relief assistance referred to in the Appendix to
12 C.F.R. Part 22.
ARTICLE 2
DEFAULTS AND REMEDIES
SECTION 2.01. Events of Default. Any event of default under the
Second Priority Debt Documents shall constitute an Event of Default under
this Second Priority Mortgage.
SECTION 2.02. Demand for Payment. Subject to the provisions of the
Collateral Trust and Intercreditor Agreement, if an Event of Default shall
occur and be continuing, then, upon written demand of Mortgagee, Mortgagor
will pay to Mortgagee all amounts due hereunder and under the Second
Priority Debt Documents and such further amount as shall be sufficient to
cover the costs and expenses of collection, including attorneys' fees,
disbursements and expenses incurred by Mortgagee, and Mortgagee shall be
entitled and empowered to institute an action or proceedings at law or in
equity for the collection of the sums so due and unpaid, to prosecute any
such action or proceedings to judgment or final decree, to enforce any such
judgment or final decree against Mortgagor and to collect, in any manner
provided by law, all moneys adjudged or decreed to be payable.
SECTION 2.03. Rights to Take Possession, Operate and Apply Revenues.
Subject to the provisions of the Collateral Trust and Intercreditor
Agreement, (a) if an Event of Default shall occur and be continuing,
Mortgagor shall, upon demand of Mortgagee, forthwith surrender to Mortgagee
actual possession of the Mortgaged Property and, if and to the extent not
prohibited by applicable law, Mortgagee itself, or by such officers or
agents as it may appoint, may then enter and take possession of all the
Mortgaged Property without the appointment of a receiver or an application
therefor, and exclude Mortgagor and its agents and employees wholly
therefrom.
(b) If Mortgagor shall for any reason fail to surrender or deliver the
Mortgaged Property or any part thereof after such demand by Mortgagee,
Mortgagee may to the extent not prohibited by applicable law, obtain a
judgment or decree conferring upon Mortgagee the right to immediate
possession or requiring Mortgagor to deliver immediate possession of the
Mortgaged Property to Mortgagee, to the entry of which judgment or decree
Mortgagor hereby specifi cally consents. Mortgagor will pay to Mortgagee,
upon demand, all reasonable expenses of obtaining such judgment or decree,
including reasonable compensation to Mortgagee's attorneys and agents with
interest thereon at the Default Interest Rate; and all such expenses and
compensation shall, until paid, be secured by this Second Priority
Mortgage.
(c) Upon every such entry or taking of possession, Mortgagee may, to
the extent not prohibited by applicable law, hold, store, use, operate,
manage and control the Mortgaged Property, conduct the business thereof
and, from time to time, (i) make all necessary and proper maintenance,
repairs, renewals, replacements, additions, betterments and improvements
thereto and thereon, (ii) purchase or otherwise acquire additional
fixtures, personalty and other property, (iii) insure or keep the Mortgaged
Property insured, (iv) manage and operate the Mortgaged Property and
exercise all the rights and powers of Mortgagor to the same extent as
Mortgagor could in its own name or otherwise with respect to the same, or
(v) enter into any and all agreements with respect to the exercise by
others of any of the powers herein granted Mortgagee, all as may from time
to time be directed or determined by Mortgagee to be in its best interest
and Mortgagor hereby appoints Mortgagee as its true and lawful
attorney-in-fact and agent, for Mortgagor and in its name, place and stead,
in any and all capacities, to perform any of the foregoing acts. Mortgagee
may collect and receive all the Rents, issues, profits and revenues from
the Mortgaged Property, including those past due as well as those accruing
thereafter, and, after deducting (i) all expenses of taking, holding,
managing and operating the Mortgaged Property (including compensation for
the services of all persons employed for such purposes), (ii) the costs of
all such maintenance, repairs, renewals, replacements, additions,
betterments, improvements, purchases and acquisitions, (iii) the costs of
insurance, (iv) such taxes, assessments and other similar charges as
Mortgagee may at its option pay, (v) other proper charges upon the
Mortgaged Property or any part thereof and (vi) the compensation, expenses
and disbursements of the attorneys and agents of Mortgagee, Mortgagee shall
apply the remainder of the moneys and proceeds so received in accordance
with Section 2.08 hereof.
(d) Whenever, before any sale of the Mortgaged Property under Section
2.06, all Second Priority Debt Obligations that are then due shall have
been paid and all Events of Default fully cured, Mortgagee will surrender
possession of the Mortgaged Property back to Mortgagor, its successors or
assigns. The same right of taking possession shall, however, arise again if
any subsequent Event of Default shall occur and be continuing.
SECTION 2.04. Right to Cure Mortgagor's Failure to Perform. Should
Mortgagor fail in the payment, performance or observance of any term,
covenant or condition (with respect to the Mortgaged Property) set forth in
this Second Priority Mortgage or under the Senior Loan Documents or the
Second Priority Debt Documents for 10 days after notice of such failure
from Mortgagee (in the case of a monetary default) or 20 days after notice
of such failure from Mortgagee (in the case of a non-monetary default),
Mortgagee may pay, perform or observe the same, and all payments made or
costs or expenses incurred by Mortgagee in connection therewith shall be
secured hereby and shall be repaid by Mortgagor to Mortgagee with interest
thereon at the Default Interest Rate from the date incurred within 10 days
after demand made by Mortgagee. Mortgagee shall be the judge using
reasonable discretion of the necessity for any such actions and of the
amounts to be paid. Subject to the provisions of the Collateral Trust and
Intercreditor Agreement, Mortgagee is hereby empowered to enter and to
authorize others to enter upon the Premises or the Improvements or any part
thereof for the purpose of performing or observing any such defaulted term,
covenant or condition without having any obligation to so perform or
observe and without thereby becoming liable to Mortgagor, to any person in
possession holding under Mortgagor or to any other person.
SECTION 2.05. Right to a Receiver. Subject to the provisions of the
Collateral Trust and Intercreditor Agreement, if an Event of Default shall
occur and be continuing, Mortgagee, upon application to a court of
competent jurisdiction, shall be entitled as a matter of right to the
appointment of a receiver (which may be Mortgagee or an employee of
Mortgagee) to take possession of and to operate the Mortgaged Property and
to collect and apply the Rents. The receiver shall have all of the rights
and powers permitted under the laws of the state wherein the Mortgaged
Property is located. Mortgagor shall pay to Mortgagee upon demand all
reasonable expenses, including receiver's fees, reasonable attorney's fees
and disbursements, costs and agent's compensation incurred pursuant to the
provisions of this Section 2.05; and all such expenses shall be secured by
this Second Priority Mortgage and shall be, without demand, immediately
repaid by Mortgagor to Mortgagee with interest thereon at the Default
Interest Rate.
SECTION 2.06. Foreclosure and Sale. Subject to the provisions of the
Collateral Trust and Intercreditor Agreement, (a) if an Event of Default
shall occur and be continuing, Mortgagee may elect to sell the Mortgaged
Property or any part of the Mortgaged Property by exercise of the power of
foreclosure or of sale granted to Mortgagee by applicable law or this
Second Priority Mortgage. In such case, Mortgagee may commence a civil
action to foreclose this Second Priority Mortgage, or it may proceed and
sell the Mortgaged Property to satisfy any Second Priority Debt Obligation.
Mortgagee or an officer appointed by a judgment of foreclosure to sell the
Mortgaged Property, may sell all or such parts of the Mortgaged Property as
may be chosen by Mortgagee at the time and place of sale fixed by it in a
notice of sale, either as a whole or in separate lots, parcels or items as
Mortgagee shall deem expedient, and in such order as it may determine, at
public auction to the highest bidder. Mortgagee or an officer appointed by
a judgment of foreclosure to sell the Mortgaged Property may postpone any
foreclosure or other sale of all or any portion of the Mortgaged Property
by public announcement at such time and place of sale, and from time to
time thereafter may postpone such sale by public announcement or
subsequently noticed sale. Without further notice, Mortgagee or an officer
appointed to sell the Mortgaged Property may make such sale at the time
fixed by the last postponement, or may, in its discretion, give a new
notice of sale. Any person, including Mortgagor or Mortgagee or any
designee or affiliate thereof, may purchase at such sale.
(b) The Mortgaged Property may be sold subject to unpaid taxes and
Permitted Encumbrances, and, after deducting all costs, fees and expenses
of Mortgagee (including costs of evidence of title in connection with the
sale), Mortgagee or an officer that makes any sale shall apply the proceeds
of sale in the manner set forth in Section 2.08.
(c) Any foreclosure or other sale of less than the whole of the
Mortgaged Property or any defective or irregular sale made hereunder shall
not exhaust the power of foreclosure or of sale provided for herein; and
subsequent sales may be made hereunder until the Second Priority Debt
Obligations have been satisfied, or the entirety of the Mortgaged Property
has been sold.
(d) If an Event of Default shall occur and be continuing, Mortgagee
may instead of, or in addition to, exercising the rights described in
Section 2.06(a) above and either with or without entry or taking possession
as herein permitted, proceed by a suit or suits in law or in equity or by
any other appropriate proceeding or remedy (i) to specifically enforce
payment of some or all of the Second Priority Debt Obligations, or the
performance of any term, covenant, condition or agreement of this Second
Priority Mortgage or any other Second Priority Debt Document or any other
right, or (ii) to pursue any other remedy available to Mortgagee, all as
Mortgagee shall determine most effectual for such purposes.
SECTION 2.07. Other Remedies. Subject to the provisions of the
Collateral Trust and Intercreditor Agreement, (a) in case an Event of
Default shall occur and be continuing, Mortgagee may also exercise, to the
extent not prohibited by law, any or all of the remedies available to a
secured party under the UCC.
(b) In connection with a sale of the Mortgaged Property or any
Fixtures and the application of the proceeds of sale as provided in Section
2.08, Mortgagee shall be entitled to enforce payment of and to receive up
to the principal amount of the Second Priority Debt Obligations, plus all
other charges, payments and costs due under this Second Priority Mortgage,
and to recover a deficiency judgment for any portion of the aggregate
principal amount of the Second Priority Debt Obligations remaining unpaid,
with interest.
SECTION 2.08. Application of Sale Proceeds and Rents. After any
foreclosure sale of all or any portion of the Mortgaged Property, Mortgagee
shall receive and apply the proceeds of the sale together with any Rents
that may have been collected and any other sums that may then be held by
Mortgagee under this Second Priority Mortgage as follows:
FIRST, to the payment of the costs and expenses of such sale,
including compensation to Mortgagee's attorneys and agents, and of
any judicial proceedings wherein the same may be made, and of all
expenses, liabilities and advances made or incurred by Mortgagee
under this Second Priority Mortgage, together with interest at the
Default Interest Rate on all advances made by Mortgagee, including
all taxes, assessments (or other charges) (except any taxes,
assessments or other charges subject to which the Mortgaged Property
shall have been sold) and the cost of removing any liens or
encumbrances (except any liens or encumbrances subject to which the
Mortgaged Property was sold);
SECOND, to the Mortgagee for the distribution to the Second
Priority Debt Parties for the satisfaction of the Second Priority
Debt Obligations owed to the Second Priority Debt Parties; and
THIRD, to the Mortgagor, its successors or assigns, or as a
court of competent jurisdiction may otherwise direct.
The Mortgagee shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with
this Second Priority Mortgage. In the event of any inconsistency between
this Section 2.08 and the Collateral Trust and Intercreditor Agreement, the
Collateral Trust and Intercreditor Agreement shall control. Upon any sale
of the Mortgaged Property by the Mortgagee (including pursuant to a power
of sale granted by statute or under a judicial proceeding), the receipt of
the Mortgagee or of the officer making the sale shall be a sufficient
discharge to the purchaser or purchasers of the Mortgaged Property so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Mortgagee or
such officer or be answerable in any way for the misapplication thereof.
SECTION 2.09. Mortgagor as Tenant Holding Over. If Mortgagor remains
in possession of any of the Mortgaged Property after any foreclosure sale
by Mortgagee, at Mortgagee's election Mortgagor shall be deemed a tenant
holding over and shall forthwith surrender possession to the purchaser or
purchasers at such sale or be summarily dispossessed or evicted according
to provisions of law applicable to tenants holding over.
SECTION 2.10. Waiver of Appraisement, Valuation, Stay, Extension and
Redemption Laws. Mortgagor waives, to the extent not prohibited by law, (i)
the benefit of all laws now existing or that hereafter may be enacted (x)
providing for any appraisement or valuation of any portion of the Mortgaged
Property and/or (y) in any way extending the time for the enforcement or
the collection of amounts due under any of the Second Priority Debt
Obligations or creating or extending a period of redemption from any sale
made in collecting said debt or any other amounts due Mortgagee, (ii) any
right to at any time insist upon, plead, claim or take the benefit or
advantage of any law now or hereafter in force providing for any homestead
exemption, stay, statute of limitations, extension or redemption, or sale
of the Mortgaged Property as separate tracts, units or estates or as a
single parcel in the event of foreclosure or notice of deficiency, and
(iii) all rights of redemption, valuation, appraisement, stay of execution,
notice of election to mature or declare due the whole of or each of the
Second Priority Debt Obligations and marshaling in the event of foreclosure
of this Second Priority Mortgage.
SECTION 2.11. Discontinuance of Proceedings. In case Mortgagee shall
proceed to enforce any right, power or remedy under this Second Priority
Mortgage by foreclosure, entry or otherwise, and such proceedings shall be
discontinued or abandoned for any reason, or shall be determined adversely
to Mortgagee, then and in every such case Mortgagor and Mortgagee shall be
restored to their former positions and rights hereunder, and all rights,
powers and remedies of Mortgagee shall continue as if no such proceeding
had been taken.
SECTION 2.12. Suits to Protect the Mortgaged Property. Mortgagee
shall have power (a) to institute and maintain suits and proceedings to
prevent any impairment of the Mortgaged Property by any acts that may be
unlawful or in violation of this Second Priority Mortgage, (b) to preserve
or protect its interest in the Mortgaged Property and in the Rents arising
therefrom and (c) to restrain the enforcement of or compliance with any
legislation or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of or compliance
with such enactment, rule or order would impair the security or be
prejudicial to the interest of Mortgagee hereunder.
SECTION 2.13. Filing Proofs of Claim. In case of any receivership,
insolvency, bankruptcy, reorganization, arrangement, adjustment,
composition or other proceedings affecting Mortgagor, Mortgagee shall, to
the extent permitted by law, be entitled to file such proofs of claim and
other documents as may be necessary or advisable in order to have the
claims of Mortgagee allowed in such proceedings for the Second Priority
Debt Obligations secured by this Second Priority Mortgage at the date of
the institution of such proceedings and for any interest accrued, late
charges and additional interest or other amounts due or that may become due
and payable hereunder after such date.
SECTION 2.14. Possession by Mortgagee. Notwithstanding the appointment
of any receiver, liquidator or trustee of Mortgagor, any of its property or
the Mortgaged Property, Mortgagee shall be entitled, to the extent not
prohibited by law, to remain in possession and control of all parts of the
Mortgaged Property now or hereafter granted under this Second Priority
Mortgage to Mortgagee in accordance with the terms hereof and applicable
law.
SECTION 2.15. Waiver. (a) No delay or failure by Mortgagee to
exercise any right, power or remedy accruing upon any breach or Event of
Default shall exhaust or impair any such right, power or remedy or be
construed to be a waiver of any such breach or Event of Default or
acquiescence therein; and every right, power and remedy given by this
Second Priority Mortgage to Mortgagee may be exercised from time to time
and as often as may be deemed expedient by Mortgagee. No consent or waiver
by Mortgagee to or of any breach or Event of Default by Mortgagor in the
performance of the Second Priority Debt Obligations shall be deemed or
construed to be a consent or waiver to or of any other breach or Event of
Default in the performance of the same or of any other Second Priority Debt
Obligations by Mortgagor hereunder. No failure on the part of Mortgagee to
complain of any act or failure to act or to declare an Event of Default,
irrespective of how long such failure continues, shall constitute a waiver
by Mortgagee of its rights hereunder or impair any rights, powers or
remedies consequent on any future Event of Default by Mortgagor.
(b) Even if Mortgagee (i) grants some forbearance or an extension of
time for the payment of any sums secured hereby, (ii) takes other or
additional security for the payment of any sums secured hereby, (iii)
waives or does not exercise some right granted herein or under the Second
Priority Debt Documents, (iv) releases a part of the Mortgaged Property
from this Second Priority Mortgage, (v) agrees to change some of the terms,
covenants, conditions or agreements of any of the Second Priority Debt
Documents, (vi) consents to the filing of a map, plat or replat affecting
the Premises, (vii) consents to the granting of an easement or other right
affecting the Premises or (viii) makes or consents to an agreement
subordinating Mortgagee's lien on the Mortgaged Property hereunder; no such
act or omission shall preclude Mortgagee from exercising any other right,
power or privilege herein granted or intended to be granted in the event of
any breach or Event of Default then made or of any subsequent default; nor,
except as otherwise expressly provided in an instrument executed by
Mortgagee, shall this Second Priority Mortgage be altered thereby. In the
event of the sale or transfer by opera tion of law or otherwise of all or
part of the Mortgaged Property, Mortgagee is hereby authorized and
empowered to deal with any vendee or transferee with reference to the
Mortgaged Property secured hereby, or with reference to any of the terms,
covenants, conditions or agreements hereof, as fully and to the same extent
as it might deal with the original parties hereto and without in any way
releasing or discharging any liabilities, obligations or undertakings.
SECTION 2.16. Remedies Cumulative. No right, power or remedy
conferred upon or reserved to Mortgagee by this Second Priority Mortgage is
intended to be exclusive of any other right, power or remedy, and each and
every such right, power and remedy shall be cumulative and concurrent and
in addition to any other right, power and remedy given hereunder or now or
hereafter existing at law or in equity or by statute.
ARTICLE 3
MISCELLANEOUS
SECTION 3.01. Partial Invalidity. In the event any one or more of the
provisions contained in this Second Priority Mortgage shall for any reason
be held to be invalid, illegal or unenforceable in any respect, such
validity, illegality or unenforceability shall, at the option of Mortgagee,
not affect any other provision of this Second Priority Mortgage, and this
Second Priority Mortgage shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein or therein.
SECTION 3.02. Notices. All notices, requests, demands and other
communications to any party hereunder shall be in writing (including bank
wire, facsimile transmission or similar writing) and shall be given to such
party: (x) in the case of the Mortgagee, at its address at Xxxxxx Square
North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000-0000 or facsimile
number (000) 000 0000 and (y) in the case of the Mortgagor, at the
addresses, in care of Rite Aid Corporation, 00 Xxxxxx Xxxx, Xxxx Xxxx,
Xxxxxxxxxxxx 00000 or facsimile number (000) 000 0000. Each such notice,
request or other communication shall be effective if given by facsimile,
when such communication is transmitted to the facsimile number specified in
this Section and confirmation of receipt is received, if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or if given by any other means,
when delivered at the address specified in this Section.
SECTION 3.03. Successors and Assigns. All of the grants, covenants,
terms, provisions and conditions herein shall run with the Premises and the
Improvements and shall apply to, bind and inure to, the benefit of the
permitted successors and assigns of Mortgagor and the successors and
assigns of Mortgagee.
SECTION 3.04. Satisfaction and Cancellation. (a) The conveyance to
Mortgagee of the Mortgaged Property as security created and consummated by
this Second Priority Mortgage shall be null and void when all the Second
Priority Debt Obligations have been indefeasibly paid in full in accordance
with the terms of the Second Priority Debt Documents and no further Second
Priority Debt Obligations are outstanding.
(b) Upon a sale or financing by Mortgagor of all or any portion of the
Mortgaged Property that is permitted by the Senior Loan Documents and the
Second Priority Debt Documents and the application of the Net Proceeds of
such sale or financing in accordance with the Collateral Trust and
Intercreditor Agreement or Second Priority Debt Documents, as applicable,
the lien of this Second Priority Mortgage shall be released from the
applicable portion of the Mortgaged Property. Mortgagor shall give the
Mortgagee reasonable written notice of any sale or financing of the
Mortgaged Property prior to the closing of such sale or financing.
(c) In connection with any termination or release pursuant to
paragraph (a), the Mortgage shall be marked "satisfied" by the Mortgagee,
and this Second Priority Mortgage shall be cancelled of record at the
request and at the expense of the Mortgagor. Mortgagee shall execute any
documents reasonably requested by Mortgagor to accomplish the foregoing or
to accomplish any release contemplated by this Section 3.04 and Mortgagor
will pay all costs and expenses, including reasonable attorneys' fees,
disbursements and other charges, incurred by Mortgagee in connection with
the preparation and execution of such documents.
SECTION 3.05. Definitions. As used in this Second Priority Mortgage,
the singular shall include the plural as the context requires and the
following words and phrases shall have the following meanings: (a)
"INCLUDING" shall mean "including but not limited to"; (b) "PROVISIONS"
shall mean "provisions, terms, covenants and/or conditions"; (c) "LIEN"
shall mean "lien, charge, encumbrance, security interest, mortgage or deed
of trust"; (d) "OBLIGATION" shall mean "obligation, duty, covenant and/or
condition"; and (e) "any of the Mortgaged Property" shall mean "the
Mortgaged Property or any part thereof or interest therein". Any act that
Mortgagee is permitted to perform hereunder may be performed at any time
and from time to time by Mortgagee or any person or entity designated by
Mortgagee. Any act that is prohibited to Mortgagor hereunder is also
prohibited to all lessees of any of the Mortgaged Property, except to the
extent that a Lease executed prior to the date hereof expressly permits
such act without the consent of the Mortgagor or the holder of any
mortgage. Each ap pointment of Mortgagee as attorney-in-fact for Mortgagor
under the Mortgage is irrevocable, with power of substitution and coupled
with an interest. Subject to express provisions to the contrary contained
in this Second Priority Mortgage, Mortgagee has the right to refuse to
grant its consent, approval or acceptance or to indicate its satisfaction,
in its sole discretion, whenever such consent, approval, acceptance or
satisfaction is required hereunder. To the extent that this Second Priority
Mortgage provides that any particular consent, approval, acceptance or
satisfaction is subject to the terms of the Second Priority Debt Documents,
it shall be granted or withheld as provided in the Second Priority Debt
Documents.
SECTION 3.06. Rules of Interpretation. References in this Second
Priority Mortgage to "Articles", "Sections", "Schedules" or "Exhibits"
shall be to Articles, Sections, Schedules or Exhibits of or to this Second
Priority Mortgage unless otherwise specifically provided. Any defined terms
may, unless the context otherwise requires, be used in the singular or
plural depending on the reference. "Include" or "includes" and "including"
shall be deemed to be followed by "without limitation" whether or not they
are in fact followed by such words or words of like import. "Writing",
"written" and comparable terms refer to printing, typing and other means of
reproducing words in a visible form. References to any agreement or
contract are to such agreement or contract as amended, modified or
supplemented from time to time in accordance with the terms hereof and
thereof. References to any Person include the successors and assigns of
such Person. References "from" or "through" any date mean, unless otherwise
specified, "from and including" or "through and including", respectively.
SECTION 3.07. Multistate Real Estate Transaction. Mortgagor
acknowledges that this Second Priority Mortgage is one of a number of Other
Mortgages that secure the Second Priority Debt Obligations. Mortgagor
agrees that the lien of this Second Priority Mortgage shall be absolute and
unconditional and shall not in any manner be affected or impaired by any
acts or omissions whatsoever of Mortgagee, and without limiting the
generality of the foregoing, the lien hereof shall not be impaired by any
acceptance by the Mortgagee of any security for or guarantees of any of the
Second Priority Debt Obligations hereby secured, or by any failure, neglect
or omission on the part of Mortgagee to realize upon or protect any Second
Priority Debt Obligation or indebtedness hereby secured or any collateral
security therefor including the Other Mortgages and other Second Priority
Debt Documents. The lien hereof shall not in any manner be impaired or
affected by any release (except as to the property released), sale, pledge,
surrender, compromise, settlement, renewal, extension, indulgence,
alteration, changing, modification or disposition of any of the Second
Priority Debt Obligations secured or of any of the collateral security
therefor, including the Other Mortgages and other Second Priority Debt
Documents or of any guarantee thereof, and Mortgagee may at its discretion
foreclose, exercise any power of sale, or exercise any other remedy
available to it under any or all of the Other Mortgages and other Second
Priority Debt Documents without first exercising or enforcing any of its
rights and remedies hereunder. Such exercise of Mortgagee's rights and
remedies under any or all of the Other Mortgages and other Second Priority
Debt Documents shall not in any manner impair the indebtedness hereby
secured or the lien of this Second Priority Mortgage and any exercise of
the rights or remedies of Mortgagee hereunder shall not impair the lien of
any of the Other Mortgages and other Second Priority Debt Documents or any
of Mortgagee's rights and remedies thereunder. Mortgagor specifically
consents and agrees that Mortgagee may exercise its rights and remedies
hereunder and under the Other Mortgages and other Second Priority Debt
Documents separately or concurrently and in any order that it may deem
appropriate and waives any rights of subrogation.
SECTION 3.08. Subordination; Intercreditor Agreement. The lien of
this Second Priority Mortgage is junior and subordinate to the lien of any
mortgage now or hereafter granted to Citicorp USA, Inc. and its successors
and assigns, as collateral agent for certain secured parties, including the
lenders from time to time party to that certain Senior Credit Agreement
dated as of the date hereof, as amended, replaced or refinanced from time
to time, with Rite Aid Corporation and its successors and assigns in
accordance with the provisions of the Collateral Trust and Intercreditor
Agreement.
SECTION 3.09. Collateral Trust and Intercreditor Agreement.
Notwithstanding any provision to the contrary contained herein, the terms
of this Second Priority Mortgage, the Liens created hereby, and the rights
and remedies of the Second Priority Collateral Trustee and the Second
Priority Debt Parties hereunder, are subject to the Collateral Trust and
Intercreditor Agreement.
SECTION 3.10. Amendments in Writing. None of the terms or provisions
of this Second Priority Mortgage may be waived, amended, supplemented or
otherwise modified except by a written instrument executed by the Mortgagor
and the Second Priority Collateral Trustee with the written consent of the
Second Priority Instructing Group, provided that (i) any provision of this
Second Priority Mortgage may be waived by the Second Priority Instructing
Group pursuant to a letter or agreement executed by the Second Priority
Collateral Trustee or by telecopy transmission from the Second Priority
Collateral Trustee, in either case with the prior written consent of the
Second Priority Instructing Group and (ii) any amendment, waiver,
supplement or other modification which by its terms adversely affects the
rights of the Second Priority Debt Parties under a particular Second
Priority Facility in a manner different from its effect on the other Second
Priority Facilities shall only be effective with the consent of the Second
Priority Representative for each Second Priority Facility so adversely
affected.
ARTICLE 4
PARTICULAR PROVISIONS
This Mortgage is subject to the following provisions relating to the
particular laws of the state wherein the Premises are located:
SECTION 4.01. Applicable Law; Certain Particular Provisions. This
Mortgage shall be governed by and construed in accordance with the internal
law of the State in which the Mortgaged Property is located without regard
to principles of conflicts of laws and Mortgagor and Mortgagee agree to
submit to jurisdiction and the laying of venue for any suit on this Second
Priority Mortgage in such state, except that the internal laws of the State
of New York (without regard to principles of conflicts of laws) shall
govern (i) those terms and conditions contained in the Second Priority Debt
Documents and/or the Second Priority Subsidiary Guarantee Agreement which
are incorporated by reference herein and (ii) the resolution of issues
arising under the Second Priority Debt Documents and/or the Second Priority
Subsidiary Guarantee Agreement to the extent that such resolution is
necessary to the interpretation of this Second Priority Mortgage. The terms
and provisions set forth in Appendix A attached hereto are hereby
incorporated by reference as though fully set forth herein. In the event of
any conflict between the terms and provisions contained in the body of this
Second Priority Mortgage and the terms and provisions set forth in Appendix
A, the terms and provisions set forth in Appendix A shall govern and
control.
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IN WITNESS WHEREOF, this Second Priority Mortgage has been duly
executed and delivered to Mortgagee by Mortgagor on the date of the
acknowledgment attached hereto.
[NAME OF Mortgagor], a
[ ],
By:
----------------------------------
Name:
Title:
Attest:
By:
----------------------
Name:
Title:
[Corporate Seal]
[NEED LOCAL FORM OF ACKNOWLEDGMENT]
EXHIBIT A
TO MORTGAGE
Description of the Land
EXHIBIT B
Premises in
Special Flood Hazard Area
APPENDIX A
TO MORTGAGE
Local Law Provisions
APPENDIX B
TO THE MORTGAGE
Definitions Annex
